Oil and gas companies are seeking new markets as fossil fuels reach the end of their useful lives. Neptune Energy is discovering new markets in CO2 and hydrogen. Why not recycle the existing infrastructure and pipelines? “As a gas producer, we play a critical part in the energy transition.” Lex de Groot, director of Neptune Energy Netherlands, offers no apologies. “Producing gas and working on the energy transition are not mutually exclusive; they complement one another.” After all, gas will continue to meet a sizable amount of the Netherlands’ energy needs for the next two decades, according to De Groot. Additionally, gas production is a critical component of constructing the energy transition. Neptune can already create, transport, and store hydrogen and CO2 via its gas resources, pipelines, and platforms. For Neptune, this is the beginning of a new business model. “It is not for nothing that it is called a transition,” Rene van der Meer explains. As foreman of Neptune’s new energy team in the Netherlands, he is responsible for identifying new revenue streams for the company in addition to oil and gas production. And the corporation is not doing this because it is nearing the end of its gas supply. The resources are far from depleted; the problem is that extracting the gas is becoming increasingly expensive. “If you have a second leg, such as hydrogen, you may progressively phase out gas.” Neptune Energy is the Netherlands’ largest offshore gas producer. The company operates 29 platforms in the North Sea, meeting around 8% to 9% of the Netherlands’ total gas consumption. Hundreds of kilometers of pipeline deliver this gas from dozens of gas fields beneath the North Sea floor to Dutch industry and residences. These platforms, pipelines, and gas resources, according to Neptune, can be leveraged to facilitate the energy transition. For instance, to store CO2. “Over the next two decades, we will continue to consume a large amount of fossil energy, the CO2 from which must be caught in order to maintain our emissions as low as feasible,” De Groot says. If CO2 prices remain as high as they are currently, CCS will soon become economically viable and subsidy-free. Within five years, Neptune could begin storing CO2. In theory, the corporation has the capability to safely store more than half of the annual CO2 emissions specified as a goal by the industry table in the Climate Agreement in vacant North Sea gas fields. Additionally, the corporation sees tremendous opportunity in the production, storage, and transportation of green hydrogen. According to Gasunie, 85% of the existing gas network can be repurposed for hydrogen transport. According to De Groot, this also applies to the North Sea’s infrastructure. Additionally, the North Sea transport network is fairly well-connected and connects directly to the current land-based network. Hydrogen must be generated by large-scale offshore wind farms. By 2030, it is anticipated that wind turbines at sea would supply 40% of the world’s electricity. Numerous and massive cables are required to bring such power to land. It is costly to lay them, even more so when the wind farms are vast and more than 100 kilometers from the coast. It would then be more prudent to use the electricity generated by wind turbines to electrolyze demineralized saltwater and produce hydrogen. This hydrogen can then be transported to land via the existing gas pipeline infrastructure. Expensive power cables would then be unnecessary. “If an existing gas pipeline with a capacity of 10 to 12 gigawatts can be used. That is a significant amount of power when you consider that the largest power line available at the present can handle up to 2 gigawatts.” Another significant advantage is that the pipeline is already in place, ensuring that the seafloor and natural environment are not disrupted. A planned route for a power cable north of Schiermonnikoog to Eemshaven has been halted following considerable opposition from environmental groups and island residents. TenneT, the operator of the electrical transport network, now needs to start over, but Neptune believes the solution is already at hand. At the very least, if electrons are converted to molecules via electrolysis. “They can access a gas pipeline there. This pipeline has already reached its destination. This eliminates the need to incur additional costs associated with traversing sensitive nature reserves “ van der Meer asserts. “By utilizing existing infrastructure, we can accelerate the energy transition while keeping it inexpensive.” Wind turbines equipped with an electrolyser that converts power to hydrogen directly in the turbine are also being developed. This hydrogen is then collected and piped to land via an intermediate station. A hydrogen-producing or hydrogen-collecting intermediate station could very well be one of Neptune’s platforms. “When you take energy from a wind farm, you are starting a pipeline,” van der Meer explains. “At some point, pressure must be increased to force the gas into the pipeline and onto the ground. That is our primary objective.” How it will transpire Neptune does not know yet, but the business is fairly certain that hydrogen will be produced at sea. “We are currently installing a 1 megawatt electrolyser on one of our platforms to validate this concept,” De Groot explains. “Of course, this is still a minor trial. With the expansion of offshore wind farms, we will soon be talking about a capacity of 1 gigawatt, or 1,000 times that. However, we are learning a great deal from it: for example, how does an electrolyser work at sea? And what safety criteria apply to the production of this gas? That is the initial step. Following that, we intend to expand.” According to Neptune, this can be accomplished more quickly and affordably because to existing infrastructure. Gas infrastructure already exists in the Dutch portion of the North Sea, stretching from Denmark to Den Helder and from the English border to Uithuizen in Groningen. Wind farms that are located nearby and generate hydrogen can be connected to it in order to transport it ashore. “We also suggest that when wind farms are planned, they consider the location of existing infrastructure to ensure that it may be reused.” Thus, by operating both facilities concurrently or reusing them, Neptune hopes to progressively transition from the fossil to the sustainable leg. This will enable the corporation, as well as society, to shift smoothly to renewable energy. Neptune anticipates making this shift from hydrogen to gas in twenty years. “The energy transition must be gradual,” De Groot explains. “Energy is absolutely necessary. Disruption of the gas supply implies that individuals will be unable to switch on their heating, lights will remain out, and certain items will become pricey. This can be avoided.”

Hydrogen and CO2 Storage Are the Future for Neptune Energy